ACCC Chairman Speaks: Here's Why We're Suing Valve

When it comes to win/loss ratios, the ACCC has a pretty impressive strike rate. It's won cases against some of the world's biggest companies over how they do business in Australia, and now the Australian consumer watchdog and it's consumer champion in chief, Chairman Rod Sims, is on the warpath against Valve, one of the world's biggest video game companies.

For those not familiar with this morning's big story, Valve has drawn the ire of the Australian Competition and Consumer Commission (ACCC), and is about to land itself in the Federal Court of Australia for alleged breaches of the Australian Consumer Law. The ACCC alleges that Valve has failed to comply with Australian Consumer Law by allegedly telling customers that they can't get refunds on games purchased through the network.

"Under Australian Consumer Law, everybody who buys a product or a service has a right to a refund if the product doesn't work. They have a right to a refund, or a repair. Those rights are enshrined in Australian Law, and our allegation is that Valve sought to remove those consumer rights which is a breach of Australian Consumer Law," Sims said in an interview this morning. "The fact that they [Valve] are an offshore company doesn't affect the rights for consumers."

So how many customers have been affected by the alleged Valve refund drama? Speaking to us this morning, Sims believes that that's the wrong way to think about it.

He says that Valve misrepresented itself to each and every one of its 1.3 million Australian Steam customers.

"We're focussing on liability here. We're not thinking about a [specific] number of breaches in this case. Step one in this case is the Court deciding if there's been a breach of [Australian Consumer Law]. We know they've got about 1.3 million active customers in Australia. I'm not sure we know how many have been affected by denying their rights, but the representations themselves are on their websites and in their agreements with [all of] those customers. Those representations are going out to all 1.3m customers."

"We've also had a large number of complaints from individuals and consumer organisations. There's a lot of concerns. We allege that the denial of consumer guarantee rights is pretty clear in that case."

The Chairman added that the watchdog had been in contact with Valve over the issues, but added that the alleged breaches of the Australian Consumer Law are so severe that they need to go in front of a judge.

"We felt that the nature of this behaviour was better to be put before the court," the Chairman said, adding that sometimes the ACCC needs to make an example out of big companies to keep the others in line.

"If every time a company — and I'm speaking generally now — said they'd stop [breaching the Act] when we asked them to, companies in Australia would have carte blanche to know that if we just knocked on the door and asked them to stop, they [wouldn't have to pay penalties]," Sims specifies.

This is the Chairman who has led the consumer watchdog to some of its most profitable wins yet against some of its biggest opponents. The ACCC in the last few years has taken Optus for $3.5 million, Apple for $2.5 million over the iPad 4G and a number of energy companies to the tune of $1.5 million. Rod Sims and his independent agency are out to set a fierce precedent that Australia is not somewhere you can misrepresent yourself as a big company.

"We want all companies doing business in Australia, even if they're doing business offshore to comply [with Australian Consumer Law]. Big media companies doing business in Australia have to comply with Australian consumer law. Point number one is if you're going to do business in Australia, you have to comply with Australian law. The second is don't have blanket conditions around the world without bothering to check," Sims warns.

Valve does specify in its terms and conditions that it won't provide refunds unless they are required by local laws. The company said as much today when it responded publicly to the lawsuit.

Valve's Doug Lombardi said today:

As with most software products, unless required by local law, we do not offer refunds or exchanges on games, DLC or in-game items purchased on our website or through the Steam Client. Please review Section 3 of the Steam Subscriber Agreement for more information.

Whether or not Valve is misrepresenting itself to customers and denying Aussie consumers their rights is a matter for the Federal Court now. Sims said that unless Valve wants to come to the table and negotiate, the case could go on for a number of years.

"Whether or not we accept an undertaking prior to court depends very much on how blatant the behaviour was. In each of these cases it depends on the approach of the company that we're taking action against. They can either move quickly [to settle]...or they can fight the case.

"If they [Valve] want to reach an early resolution it could be over in a month or two. They're a huge company with massive resources, so if they want to fight it could go one or two years.

"We'll wait and see to see if they want to do."


Comments

    At least the ACCC is doing something..

      Oh, I think they do more than they are sometimes appreciated for. For example:
      * Substantial fines to companies that engage in illegal doorknocking (e.g. not leaving when asked)
      * Slapping Apple for the 4G-that-doesn't-work-in-Australia iPad
      * Drip pricing by Airlines
      * Warranties on mobile phones shorter than the mobile contract they are sold with

      I think there is certainly plenty more for them to do, but some of these - particularly the last one, in my opinion - are really quite big wins.

      I believe the ACCC also basically threatened the major telcos that if they didn't get their act together with regard to network-unlocking phone handsets then they (the ACCC) would make the rules for them. (As such, on-plan phone handsets will generally not be locked at all or can be unlocked free, and pre-paid handsets can generally be unlocked either free or for a minimal price after a minimum spend to cover the provider subsidy of the handset, or by paying a larger fee prior to that).

    I appreciate what Mr. Sims and the ACCC are doing here, but I'd like to know what they're doing about the dodgy pricing practices of companies like Adobe and Autodesk? I've heard nothing since the inquiries 2 years ago where the heads of those companies gave completely unsatisfying responses.

      What's wrong with the pricing?
      It's a free market, there is no law saying they can't charge whatever they want.

        There's nothing illegal about the pricing.
        There's something morally wrong with the pricing.
        Two different factors.

        People sometimes get confused in thinking that the law = justice. It's an understandable mistake when the government departments in the legal system CALL themselves departments of Justice.
        False advertising? ...A fight for another day, that one.

          Something? What exactly?
          Legal and moral issues are different.

          Last edited 29/08/14 6:17 pm

            What's wrong with the pricing?
            There's nothing legally wrong with the pricing. There's something morally wrong with the pricing.
            It's unfair for Australians to be charged double US prices for absolutely no extra work than delivering digitally to a different IP address. It's morally wrong to do this, but it's legal.

              Welcome to business. Once every so often, ok....maybe always. Yes, always. Businesses act immorally.

              Its not just software, but also everything from transport to food to education to healthcare.

              Every business in the world, at one time or another has done something immoral.

              Last edited 01/09/14 1:51 pm

                Yup. Which is why it's hypocritical and naive fucking moronic to hide behind morality as an excuse to be 'treated well by consumers'. Argue anything else you like, but "people shouldn't do this because it's immoral," is a protection that consumers only sympathize with when the victim isn't a bigger offender themselves.

                Tit for tat. If you can't take the heat, get out of the kitchen. Live by the sword, die by the sword. What goes around, comes around. Glass houses, stones. Don't dish it if you can't take it, etc, etc, etc. It's one of the oldest most universal rules humans have and where there are practically no consequences for offending, consumers fall back on it.

                  Gibberish.

                  Last edited 05/09/14 2:39 pm

        Free market works when there is competition. When the publishers set the price on the platform selling the product, there is no competition.

          Publishers/manufacturers have always set the price they sell to distribution which is no different with this.

          The resellers compete with one another on the price, so it's still a competitive market.

          Last edited 29/08/14 6:16 pm

    Thankfully action is being taken.

    Especially in the wake of Brokenfield 4, we need more rights against these online digital distribution systems.

      Yea, i heard BF4 was so bad, i didn't even pirate it!

        confirmed.... it has had many problems and still does have some. But.... i still play and have fun. There isn't anything else out there that is similar that takes my fancy.

          A bunch of times I considered trying for a refund just to see what they'd do. I personally don't believe it is fit for purpose and so far efforts to address the problems, which clearly DICE and EA admit the game has, have not been acceptable. BF3 with it's 10 tick is still more responsive than BF4 and it now having 30 tick.

            Yep agreed. It actually got better prior to the patch that came out with the dragons teeth maps but then for some reason when they launched it seemed to revert. There still sounds like there is some good stuff happening on the cte servers but who knows when or if that will be implemented.

            The new maps brought a lovely new bug for me that now if someone how joins on me leaves or crashes out it also crashes me out of the game. So good.

              Apparently there is a very big patch coming this map.

              It seems they did a build that patched in stuff, but then the Dragons Teeth build wasn't compatible so they just went back to the previous build.

              Although honestly if it was as bad as it is now, I don't understand how I played as much as I did.

              One can hope the finally fix the game.

              Last edited 01/09/14 10:40 pm

    Petrol? Supermarkets?

      Merkins? Tupperware?

      ACCC is also investigating price sharing between the petrol mobs also I believe.

    Sweet, does that mean i can get a refund on all these shit games i have?

    Dammit, clicked on the article hoping it was all about the 'Australia-tax' heaped on to games. Oh well, I guess there's not actually much they can do about that seeing as anyone can sell anything for whatever they want really, it's up to the consumer whether they buy it or not.

    People, this is being put out of proportion due to lack of knowledge about the ACL and Steam's Subscriber Agreement. There will be no big court case. The ACCC knows this, hence the statement "If they [Valve] want to reach an early resolution it could be over in a month or two. They’re a huge company with massive resources, so if they want to fight it could go one or two years". The ACCC are just playing tough.
    Valve is not against adhering to local consumer law; they have already implemented specific clauses for the EU. Section 3 of the agreement is in clear violation of our law. There is the potential for huge losses on Valve's part; losses that would far exceed the cost of asking their lawyers to draft a clause to be entered into the subscription agreement. The ACCC don't want a court case. Valve don't want a court case. A mere paragraph of text that specifically acknowledges Australian law is going to save everybody a lot of time, money and headache.

    Other than the refund issue, there is also the fraud that they are committing by not giving you an extra copy of a game if you already own it when you buy a bundle, yet they still charge you full price for the bundle.

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